AbbVie Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Financial Performance: Adjusted earnings per share $2.97, $0.11 above guidance midpoint; total net revenues $15.4B, >$400M ahead of expectations. Ex-HUMIRA platform sales grew 22%, Skyrizi and Rinvoq on pace for >$25B combined sales this year.
• Pipeline Progress: Late-stage programs: EMRELIS approved for non-squamous non-small cell lung cancer, Rinvoq for GCA; Phase III results in alopecia areata for Rinvoq; regulatory submission of TrenibotE in aesthetics; strategic transactions bolstering pipeline in immunology, oncology, neuroscience, etc.
• Strategic Transactions: Acquired Capstan for in vivo CAR-T platform; licensed ISB-2001 for multiple myeloma; collaborated with ADARx for next-gen siRNA therapies; entered obesity space via Gubra deal.

Segment Performance

• Immunology: Delivered total revenues >$7.6B. Skyrizi global sales $4.4B, up 61.8% operational; Rinvoq global sales $2B, up 41.2% operational; HUMIRA global sales >$1.1B, down 58.2% operational due to biosimilar competition.
• Oncology: Total revenues nearly $1.7B. IMBRUVICA global sales $754M, down 9.5%; Venclexta global revenues $691M, up 8.3%; ELAHERE and EPKINLY had double-digit revenue growth; EMRELIS in early U.S. launch for non-squamous non-small cell lung cancer.
• Aesthetics: Global sales nearly $1.3B, down 8% operational. BOTOX Cosmetic $692M, JUVÉDERM $260M, both with lower growth rates due to economic challenges.
• Neuroscience: Total revenues ~$2.7B, up 24% operational. Vraylar $900M (+16.3%), BOTOX Therapeutic $928M (+14.2%), Ubrelvy $338M (+47.2%), QULIPTA $267M (+76.9%), VYALEV $98M (+56%) with strong international launch.

Guidance

• Raised full-year net revenue to $60.5B, an increase of $800M. Adjusted earnings per share guidance raised to $11.88-$12.08.
• Q3 net revenues expected ~$15.5B, with adjusted earnings per share between $3.24 and $3.28.
• Immunology: Skyrizi global revenues expected $17.1B, HUMIRA U.S. revenues $3B; Neuroscience: global sales expected $10.5B; Oncology: IMBRUVICA $2.9B, Venclexta $2.8B.

Risks

• Biosimilar Competition: Impact on HUMIRA sales and potential minor impact on Skyrizi/Rinvoq, though core momentum driven by product data and indications.
• Economic Challenges: Aesthetics market affected by lower consumer sentiment and economic conditions, moderating near-term category growth expectations.
• IRA Price Negotiations: Uncertainty around Medicare drug price negotiations, though Venclexta may benefit from expanded orphan drug exemption under new legislation.

Question and Answer

Q: Mohit Bansal asked about impact of STELARA biosimilar on Skyrizi and Rinvoq.

A: Jeff Stewart and Rob Michael responded that Skyrizi's core momentum is from data, indications, and value proposition; prior head-to-head trial with STELARA showed share gains, and biosimilar impact is minor.

Q: Terence Flynn asked about Skyrizi/Rinvoq guidance and EU tariffs.

A: Rob Michael mentioned Skyrizi/Rinvoq on track for >$20B combined sales by 2027, and AbbVie is well-positioned for EU tariffs with U.S. manufacturing capacity investments.

Q: Chris Schott asked about Skyrizi drivers and BD strategy.

A: Jeff Stewart and Rob Michael discussed Skyrizi's broad momentum across indications, Reents broke down Skyrizi revenue split, and Rob Michael outlined BD focus on long-term growth drivers via internal pipeline and external innovation.

Q: Carter Gould asked about VYALEV's growth drivers.

A: Jeff Stewart stated VYALEV's strong global launch, driven by international demand with U.S. Medicare ramp expected later in the year.

Q: Tim Anderson asked about IRA negotiations and aesthetics impact.

A: Rob Michael noted Venclexta may benefit from orphan drug exemption, and Jeff Stewart said GLP-1 impact on aesthetics is net neutral.

Q: Vamil Divan asked about alopecia areata impact on Rinvoq and aesthetics macro.

A: Jeff Stewart discussed Rinvoq's potential $2B peak sales from new indications, and aesthetics macro is stable but faces chronic economic challenges.

Q: Steve Scala asked about aesthetics economic uncertainty and Alzheimer's asset.

A: Jeff Stewart and Roopal Thakkar addressed aesthetics challenges and Alzheimer's asset status, with Thakkar discussing next-gen A-beta antibody progress.

Q: Unidentified Analyst asked about Skyrizi IBD sales and aesthetics volume.

A: Scott Reents and Jeffrey Ryan Stewart provided insights on Skyrizi IBD sales proportion and aesthetics volume-driven growth.

Q: Gary Nachman asked about IL-23 competition and neuroscience investment.

A: Jeffrey Ryan Stewart and Scott Reents discussed IL-23 competition headroom and neuroscience investment in VYALEV and tavapadon.